Update: I can get the live system to run. At the initial menu choose F6 Other Options. Then replace the ending "-- " with "vga=791 noreplace-paravirt". It boots.

Now off to see if it actually works, then to try install.

Update #2 : Yes, I did an install after booting as above. (The formating of the drive as ext3 took forever.) Just needed to edit /boot/grub/menu.lst to add "vga=791 noreplace-paravirt" and it now boots up just fine on its own.

Ok, I'm stuck. I successfully installed Turnkey Linux MediaWiki Live CD into Windows 7 Virtual PC without a problem using the F6 key trick as listed above. Like previous comments, it appeared to freeze at a point during the install, but it completed fine with no errors. But now I can't get the installed system to boot up -- it 'powers down' the VM after about 5 seconds.

I tried hitting ESC to access the boot menu, hitting 'e' to edit the default entry, then changing this line as follows: